The Kuala Lumpur High Court will deliver tomorrow a historic decision on Najib Razak’s SRC International trial, whereby a guilty verdict may result in a 20-year jail sentence for the former prime minister.

As a security measure, the Kuala Lumpur court complex, one of the largest in Southeast Asia, will close its gates to all except those slated to appear before the court, including the 67-year-old Pekan MP.

Delivering the verdict is presiding judge Mohd Nazlan Mohd Ghazali, a 52-year-old Oxford graduate with banking experience, who must evaluate more than 2,000 pages of submissions from the prosecutors and the defence after the trial closed on June 5.

The judge ruled last November, halfway through the trial, that the prosecution has established a prima facie case – or a guilty presumption until proven otherwise – against Najib, who was ordered to call his defence.

The trial, which began on April 3, last year, saw 57 prosecution witnesses and 19 from the defence being called to testify, with 807 exhibits filed as evidence.

Najib faces seven charges with receiving RM42 million in SRC International funds between December 24, 2014 and February 6, 2015, transferred into his AmBank accounts via subsidiary Gandingan Mentari Sdn Bhd and corporate social responsibility (CSR) partner Ihsan Perdana Sdn Bhd.

Najib served as adviser emeritus for SRC International, which was once a subsidiary of 1Malaysia Development Bhd. 

The former finance minister is charged with three counts of criminal breach of trust, three counts of money-laundering and one count of abuse of power.

Should Nazlan convict Najib for any or all of the charges, the judge is not expected to immediately hand out a sentence, with mitigation likely to be set at a later date.

After such a mitigation hearing, Nazlan can then allow an application by the defence to stay the execution – or to delay carrying out the jail sentence – until the appeals process has been exhausted.

Although uncommon for crimes that do not involve murder or terrorism, the judge can otherwise dismiss an application to stay the execution. In such a scenario, Najib would be immediately escorted to jail, from where he can file his appeals.

The vacation of Najib’s parliamentary seat would only happen if the appeals have been exhausted and the conviction is upheld by the appellate courts.

Under Article 48(4)(b) of the constitution, upon a conviction exceeding RM2,000 or more or prison sentence of above one year, as long as an MP files an appeal within 14 days, his seat will not be vacant.

Should Nazlan find Najib not guilty for any or all of the charges, the prosecution can later file its appeals at the Court of Appeal.

Due to Malaysia’s two-tiered appeal process, appeals of the high court decision will eventually be exhausted at the Federal Court, taking at least a year.

Burden of proof

As in all criminal cases, the burden of proof is on the prosecution, who must prove Najib’s guilt beyond reasonable doubt. It is a higher standard of proof required than in civil cases, where the plaintiff need only prove their case on a balance of probabilities.

In November, after the prosecution concluded its case, Nazlan delivered his key findings, ruling that prima facie for all seven charges had been established by the prosecution, then led by former attorney-general Tommy Thomas.

Thomas, 68, who resigned following the fall of Pakatan Harapan in late February, was assisted by ad hoc prosecutor V. Sithambaram, a seasoned criminal lawyer. Najib is represented by a dozen lawyers led by Muhammad Shafee Abdullah, 68.

The defence stage of the trial began after Najib took the witness stand last December where he read aloud a witness statement that covered nearly 300 pages. He was then cross-examined by Thomas and later Sithambaram for 11 days.

Nazlan said prosecutors proved that Najib, due to his position, was able to cause the establishment of SRC International, which although stated to be a strategic natural resources development company for the country, “was in truth designed to be a vehicle for his own private advantage”.

“The accused had enormous influence and wielded an overarching position of power in SRC International, he was not only the person who, as the finance minister, also the chairman of Ministry of Finance (MoF) Inc, the sole shareholder of SRC International and 1MDB but was also as the prime minister, vested the authority under the articles (company constitution) to appoint and dismiss directors,” said Nazlan.

Najib was also behind government guarantees that led to Retirement Fund Inc (KWAP) to issue RM4 billion in loans to SRC International in 2011 and 2012, which from the RM42 million originated, Nazlan said.

The prosecution’s case for abuse of power was proven due to testimony by former second finance minister Ahmad Husni Hanadziah, who said Najib expressly instructed him not to interfere with any matters concerning 1MDB and SRC International.

Husni’s suggestion to visit Switzerland in 2015 to verify the status of the funds of SRC International that were frozen by the Swiss authorities was also flatly refused by Najib without explanation, the judge said. This was despite Najib having the authority of supervision over all companies owned by MoF Inc.

“Such involvement exhibited by the accused is solely to demonstrate the existence of a private and personal interest in SRC International,” said Nazlan.

Prosecutors showed Najib issued a total of 15 cheques from two bank accounts involving the total amount of about RM10.7 million, confirmed to be cleared as payment received by the payees.

The spending included trips abroad to purchase luxury goods in Italy, Hawaii and a stay at the Shangri-La hotel in Bangkok in 2014 and 2015. Other cheques were used to fund home renovations and political activities for the Barisan Nasional coalition. 

Prosecutors had proven knowledge on the part of Najib that the RM42 million came from SRC International due to various “factual circumstances”. 

“I find that the accused knew that the RM42 million was proceeds of an unlawful activity or in the best case for the defence, the accused failed without reasonable excuse to take reasonable steps to ascertain whether or not the RM42 million was the proceeds from an unlawful activity. This would include the very sheer volume and frequency of the transaction in the three bank accounts of the accused.”

On Najib’s discovery of the transactions when the 1MDB scandal broke in 2015, the judge also noted the absence of any evidence or enquiries made by Najib “let alone any police reports or complaints to the bank”.

Summarising the prosecution’s case in October, Sithambaram argued that Najib’s purported shock upon finding out that RM42 million was in his account was an act and that he would have lodged a police report if he was innocent.

“If you are the prime minister of a country and if somebody banked RM42 million into your account, I think any normal person would lodge a police report and have the matter investigated. But nothing of the sort happened,” he said during the prosecution’s oral submission.

Sithambaram also referred to former SRC International CEO Nik Faisal Ariff Kamil and Penang-born businessman Low Taek Jho, commonly known as Jho Low, who were mentioned and blamed by the defence for illicit activities within the government-linked entity.

“A lot of people have been named, such as Nik Faisal and Jho Low, but we have seen no proof that money went into their accounts. The only person we have proof that money went into his account is the accused.”

Sithambaram said Low was acting on behalf of Najib to ensure the latter had at all times sufficient funds to utilise for various purposes.

“It is clear that Jho Low never utilised any of the funds in the accused’s three current accounts and, therefore, he did not gain anything by depositing funds into the accounts except to ensure that the cheques of ‘Optimus Prime’ (Low’s codename for Najib) did not bounce.”

Sithambaram said it’s impossible for Najib to be ignorant of his own bank accounts and told the court that this was the first case he encountered whereby a victim of fraud received millions.

Defence

In its closing submissions in June this year, the defence argued that Husni’s testimony be disregarded due to witness’s belief that Najib was behind a sexual-harassment report lodged by a former female staff member.

The defence also submitted that Najib did not lodge a police report in mid-2015 in relation to the RM42 million credited into his bank accounts because investigations into SRC International were under way.

Regarding irregularities in his Ambank accounts, Najib said he did not lodge a report as he did not want to be seen to be intervening in ongoing investigations at the time.

Najib’s lawyers also argued that the prosecution never established that RM42 million originated from KWAP’s RM4 billion in loans to SRC International.

Najib was led to believe by Low that the funds deposited in his personal bank accounts in 2014 were donations from the late Saudi ruler King Abdullah Abdul Aziz Al-Saud.

Najib was ultimately a victim of a conspiracy that involved Low, Nik Faisal, as well as rogue bankers, the defence said.

In the November prima facie ruling, Nazlan noted the Arab donation reasoning, which was raised long before the defence stage. The judge, however, observed that such a defence could not be sustained as the said donation had been fully utilised several months before the RM42 million deposits were made beginning December 2014.

This is the country’s first criminal trial involving a former prime minister. Najib faces a total of 42 charges, spread out over five criminal trials – with three ongoing.

The ongoing 1MDB trial involves RM2.282 billion in public funds that Najib allegedly received between 2011 and 2014 while at another ongoing trial, Najib faces one abuse of power charge for tampering with the 1MDB audit report. – July 27, 2020.